“He claims that the budget for Iraq was going to be the budget at the height of the surge for the next 10 years,” Norquist says. “Even the Pentagon was planning to spend less and have fewer troops there after the success of the surge, so it’s thoroughly dishonest budgeting.”

That imaginary savings — which includes an assumption that the war in Afghanistan will continue at the same pace for 10 years — alone amounts to close to $1.5 trillion. Norquist notes that Obama also claims he will slash the deficit in half by 2013. But Obama excludes additional spending in the $787 billion stimulus package.

Norquist, who runs a weekly meeting of conservative leaders, is the fulcrum of the conservative movement. Interviewed at the Conservative Political Action Conference (CPAC) this week, Norquist describes Obama’s spending plan as a “real challenge, unfortunately, for the country, and fortunately for the conservative movement. None of these things will make the economy better. They’ll all make it worse.”

President Obama’s agenda for spending trillions the country does not have is a nightmare for conservatives, yet the mood at CPAC has been upbeat. Those attending the three-day conference interrupted speakers like Rep. Paul Ryan, R.-Wis., and Mike Huckabee with almost as much applause as Obama received when he spoke before a joint session of Congress.

“They are pretty fired up,” Rep. Tom Price, the chairman of the Republican Study Committee, the caucus of House conservatives, tells Newsmax. “I think that folks are seeing that the emperor has no clothes here in Washington, and that conservative, reasonable, American-principled policies are endangered by this administration and this Congress.”

Norquist, a board member of the American Conservative Union, which runs CPAC, notes that attendance at CPAC this year is almost 9,000 compared with 7,000 last year.

“We’re doing well as a movement, somewhat partially because we’re in opposition,” Norquist observes. “The other team is being awful. Their corruption is coming out, their greed is coming out, their taxes and spending are coming out. We no longer have to sit there and point and shout hysterically, They’ll do X! because they’re doing X. You can calmly say, Did you see they just did X?”

As a result, Norquist says, “We sound more reasonable, because we’re talking about facts, not fears and speculation about what they are doing. And frankly, everything they’re doing is worse than we could possibly have claimed previously with any credibility. If we’d said they were going to come up with a $3.6 trillion spending plan, people would have said, Oh that’s ridiculous.”

Republicans now must raise money and have the right candidates ready for 2010, Norquist says. In the best scenario, Republicans will win back their majority in the House.

“If we do that, then you stop the hemorrhaging,” he says.

“It’s a good time for the movement,” Norquist says “It’s a bad time for the country, but you can’t make progress and you can’t defeat the left’s ideas until they threaten to implement them. The real danger is that the other side does so much damage that it gets us into a Great Depression scenario.”

Ronald Kessler is chief Washington correspondent of Newsmax.com. View his previous reports and get his dispatches sent to you free via e-mail. Go here now.